With power bills putting enormous strain on household budgets around the nation, uptake of rooftop solar panels has skyrocketed. But with new solar feed-in tariffs expected to be announced next week, will it be cost-effective to generate your own power?
Take a look at the Australian economy over the past few years and you’ll notice inflation has infected just about everything. From groceries to fuel to transport, it seems every aspect of society is becoming more expensive.
Energy bills are no exception, with consumers hit with two annual increases to the default market offer (DMO) of more than 20 per cent each over the past two years. In fact, increasing energy costs are behind the price increases of many other products.
So, in a bid to escape the new higher prices, more and more households and businesses have been installing rooftop solar panels. Customers win by reducing their bills, while retailers win by having more electricity in the system, which drives the wholesale price down.
Now, these consumers look set to have their bills drop a little bit further when solar feed-in tariffs for 2023-24 are announced next week.
Industry experts told The Australian newspaper the draft ruling is likely to show at most only a small increase to feed-in tariffs and they may even remain unchanged as wholesale power prices tumble amid private and government measures to curtail escalating prices.
What is a solar feed-in tariff?
When you feed electricity back into the network from your solar panels, energy retailers pay you for that power. The minimum rate they have to pay you varies by state and is known as a ‘feed-in tariff’.
The idea behind the scheme is to encourage uptake of renewable energy sources and reduce cost-of-living pressures at the same time. The tariff applies to small-scale home solar producers located in the ACT, NSW, QLD, SA and Tasmania.
The price is set once a year by the Australian Energy Regulator (AER), through its Energy Made Easy program. The tariffs apply to solar systems in those jurisdictions connected to the National Energy Market power grid.
In the NT, state-owned electricity retailer Jacana Energy sets the feed-in tariff, while Victoria has a separate Essential Services Commission (ESC) which sets the price in that state.
But despite industry insiders flagging a modest increase to national feed-in rates, Victoria’s ESC announced its tariffs for the year late last month – and the rate will actually go down to its lowest level since being introduced.
Victorian customers will get 3.3 cents for each kilowatt-hour (kWh) exported back into the grid, with the 33 per cent reduction continuing a downward trend that’s been going on for three years now.
Back in 2021-22, customers in Victoria were credited with 10.2c/kWh, which fell to 6.7c/kWh in 2022-23, 5.2c/kWh in 2023-24 and the new lower amount will come into effect from 1 July for the 2024-25 financial year.
So, it remains to be seen if the drop seen in Victoria’s tariffs will be replicated nationally.
Also read: Too many Aussies ignoring valuable energy rebates
It never ceases to amaze me that the profits of Energy companies are never mentioned when there are changes to the feed in tariffs. Why should the energy that is fed back into the Grid for say 5 cents per kwh, then be sold by Energy companies for 44 cents per kwh or more? No wonder some companies are making record profits. This is in reality theft from independent producers of energy (roof top solar owners). Those who have roof top solar are told to use up their energy in the middle of the day when most people are at work, that excess is taken by the energy companies who make profits out of it. It is infuriating to see that you can produce 35kwh of solar in a day, use 6kwh of grid energy, produce 25kkwh of solar that has been fed back into the grid and still owe them money. It is time for some honesty from Energy Regulars to justify this robbery.
You are correct in that the energy companies are ripping us off but don’t just stop there, the Federal and State Govs are also ripping us off and feeding us a almost weekly does of miss information and false hope, all bundled up as the “ the cost we ( not them ) must pay for the great transaction to green energy” .
The only way in the current environment that you can really reduce the ripp off is to go off grid ..but that also brings its own problems depending on your location.
Anyway speaking of ripp offs and miss information. Where is my promised $275 electricity bill reduction Mr. Bowen ? and I use the word Mr. very loosely.
The feed in tariffs are too low although at least here in Queensland I am getting 12 cents per kw/hr.
But they sell it to me for 30 cents a kw/hr at night, plus there are all these other flat charges applied that did not exist years ago. All the same solar is saving me about $400 a quarter and my system has well and truly paid for itself so it’s all savings now.
This year I am also getting a $600 cost of living rebate on top of my pension rebate so all good.
I’d love to know where you get 12c per kw/hr FIT. The best I can find is 6c! And it seems the more I produce the lower the FIT I receive. It’s a huge scam.
In Western Australia the buy back is 10c at peak times and only 2.25c off peak. Our charges per unit is over 28c plus $1.004 per day supply charge. When we first installed solar panels(early 2000’s) the buyback was 20c per unit. It has helped reduce our bills but not as much as we had hoped. Competition would be great but we have only Synergy supplying electricity in WA.
I reply to Frank.
Yes I have replaced my 13 yr old Solar system due the inverter dying, My previous system was a 2kw one
Now for the kicker. I Synergy advised as I had upgraded no 7 cents per unit will be paid. The problem I found was the 2kw are no longer supplied to the system so I selected the smallest that was available under advice from a Consulting Electrical Engineer to ensure my new system would be suitable. Yes I have upgraded to the smallest system available and can do nothing about that so I am screwed by Synergy.
The second kicker is now THEY WILL PAY ME 10c/hr, as you mentioned ,however it is between the hours of 3.pm to 9pm when the sun shines and then 2c/hr from 9pm to 3pm.
My check in the West Australian from infro from BOM sunset is around 6.30pm. I am paid for 3.6hrs only. Synergy also advised why the 9pm was accepted due to some parts of WA have daylight saving. Synergy supplies to the SW of WA only. DAYLIGHT SAVING IS NOT IN WA.
This statement was from Synergy when I rang them.
How bright are those at Synergy making those rules. Sorry that came from the Government. This shows how bright those who run WA.